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2019

04/15

China Simulated IC Welcomes New Opportunities for Development

"Analog IC is an integrated circuit analog IC that processes analog signals. It belongs to the sub-category of integrated circuits. According to the different forms of signal processing, integrated circuits can be divided into analog IC and digital IC. Among them, analog IC accounts for about 15% of the IC market, and in 2017 the market size is about 53.1 billion US dollars. Although analog IC and digital IC belong to integrated circuits, there are great differences in signal processing types and industry characteristics. According to the different processing signals, integrated circuits can be divided into analog IC and digital IC. Integrated circuits that process signals as analog signals can be defined as analog IC.

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What is analog IC

Analog IC: An integrated circuit that processes continuous natural analog signals, such as sound, light, electricity, electromagnetic waves, velocity and temperature, is an analog IC in the usual sense. Product types are mainly divided into signal link chips and power management chips according to their functions, representing companies such as Texas Instruments, ADI, etc.

Digital IC: An integrated circuit that processes discrete electrical "1" and "0" signals is a digital IC in the usual sense. Product types are mainly divided into memory, logic IC and micro components according to their functions. Intel, Qualcomm, Meguiar and so on represent the company.

Analog IC is composed of two modules: power management module and signal link module. The "0" and "1" characteristics of digital signal endow digital circuit with powerful logic calculation ability and convenient storage ability. Analog signal potential is relatively polymorphic, and it is difficult to store, add, subtract and calculate logically. Therefore, it is different from the function of digital IC to store and provide computing power. The two main uses of analog IC are as follows:

Power Management and Signal Link

1. Power management: The normal working voltage required by chips, components and circuit systems is different. Analog IC can increase and decrease the fixed voltage provided by batteries and power sources. Power management chips are generally needed for power supply systems, so there is a large market space. At the same time, due to the basic stability of technical indicators and the slow iteration of technological renewal, the barriers are relatively low and the layout of domestic companies is more.

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2. Signal Link: A bridge connecting the real world and the digital world, which converts the actual natural signals such as electromagnetic wave, sound, temperature and light received by antenna or sensor into multi-digit digital signals, so as to facilitate the subsequent processing of digital signal processors.

Among them, the RF front-end chips need to keep up with the progress of communication technology, which has high iteration speed and high barriers.

Power management chips are the main part of analog IC. Power management chips accounted for 53% of analog ICs in 2017 (standard powerIC and analog ASSP powerIC), and the market size was about 28.14 billion US dollars.

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Compared with digital IC, analog IC has unique properties.

Although digital IC and analog IC belong to the category of integrated circuits, their basic working principles are quite different. The difference of their basic working principles determines the different product characteristics, design ideas, process selection and market distribution of digital IC and analog IC.

The analog integrated circuit industry has the following four characteristics: demand side: decentralized downstream demand, long product life cycle. Supply side: inclined to mature and special technology, eight-inch production line as the main supply. Competitive end: The competition pattern is dispersed, and the competition pressure between manufacturers is low. Technological end: The industry has high technical barriers, emphasizing experience and putting people first. The life cycle of analog IC products is longer, once the product is cut into, stable chip shipments can be obtained.

Demand Level: The downstream automobile and industrial use of analog products requires reliability and safety, and they prefer mature and stable products with relatively strict qualification, generally no less than one and a half years.

Supply level: Advanced manufacturing process has little effect on the performance of analog products, and it is not driven by Moore's law, so the iteration of performance updating of analog products is slow. Therefore, the life cycle of analog products is longer, generally no less than 10 years. The famous audio amplifier chip NE5532 has a life cycle of 30 years, and is still the standard chip for many audio devices.

Looking at Current Development Opportunities of Simulated IC from Upstream and Downstream

Downstream demand: The demand for automobiles and communications is rising. According to ICinsights, the industry will enter the fast lane. By 2020, the composite growth rates of communication analog chips and automotive electronics in downstream applications of analog circuits will be the fastest, with 7.4% and 7.0% respectively. The overall market size of analog circuits will show an annual compound growth rate of 6.6% from 2017 to 2022, which is higher than the annual compound growth rate of 5.1% for integrated circuits. We believe that the downstream demand of analog circuit industry is scattered, and is less affected by a single downstream. Therefore, under the background of the gradual maturity of smartphones, the reverse trend of market size can still be achieved.

The market benefits from the increase of base stations under the 5G communication transformation in the short term and the structural change of smartphone RF front-end links, and the long-term benefit from the trend of automotive electrification. Analog circuit industry still has high growth and investment value.

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From the perspective of upstream supply, upstream raw materials are mainly wafer materials, wafers are 6 inches, 8 inches and 12 inches. Because the simulation IC prefers mature process and the cost of process is low, at present, the wafer supply mainly uses 8 inch wafer. According to the EMI data, if the statistical OEMI production capacity, the simulation production capacity accounts for about 11% of the total production capacity, the OEM production capacity will be converted, and the simulation products account for about 22% of the total production capacity.

Assuming that the simulated production capacity is fully released, the capacity supply of 1355 kwpm can be realized. If the simulated production increases by 6.6% annually from 2017 to 2022, the capacity will be abundant until the end of 2019.

The Growth of Domestic Simulated IC Industry ushered in the Golden Age

With huge demand and low self-sufficiency, the current situation of semi-conductor trade deficit is still growing, and the domestic demand for integrated circuits is strong. Integrated circuit industry is a strategic and basic industry for national economic and social development, and an important driving force for China's information technology development and industrial transformation.

According to ICinsights statistics, the demand of integrated circuit industry in China mainland reached 35.1 billion US dollars in 2017, accounting for 44.8% of the global market. The value of imported integrated circuits from China mainland exceeded 200 billion US dollars for the first time in 2013 and reached a new high of about 260.1 billion US dollars in 2017, with a trade deficit of 193.2 billion US dollars. Low self-sufficiency still exists, and the replacement space of simulated IC is estimated to be 27.3 billion US dollars in 2020.

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Ending

At present, the self-sufficiency rate of integrated circuits in China is less than 13% in 2015, which is still far from the goal of 40% in 2020. ICinsights predicts that the self-sufficiency rate of integrated circuits in mainland China will reach 20.9% in 2020. The self-sufficiency rate of domestic analog IC is less than 10% in 2017. According to HIS forecast, the market size of domestic analog IC in 2020 is expected to reach 3.3 billion US dollars. If self-sufficiency is realized completely, the replacement space will be about 27.3 billion US dollars.